What has ICICI Bank stock done?
ICICI Bank stock had formed a Bullish base at 270-280 levels during early 2015. That base was finally broken in August-September 2015. The breakdown produced disastrous results as stock tanked from 270-280 all the way down to 180 levels - a decline of 32-35% by Feb 2016.
What can we learn?: When a stock breaks down an established base: then it only invites dramatic selling and stock can deliver huge negative returns.
Another Lesson: A rising tide lifts all boats even leaking ones.
ICICI Bank post breakdown was a leaking boat but then dramatic sentiment upswing post-Feb 2016 helped ICICI Bank stock make a dramatic recovery.
But ICICI Bank stock has now hit a wall. Previous support of 280 has now become a resistance and fresh buying in the stock cannot emerge till stock takes out that resistance in a pretty decisive fashion
Another Lesson: As long as the stock is trading below 280-290 - it will be considered trading under water.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers